The role of world trade organisation in international trade and investment


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HERBERT: The Role Of World Trade Organisation In International Trade And Investment 
Page | 47 
THE ROLE OF WORLD TRADE ORGANISATION IN INTERNATIONAL TRADE 
AND INVESTMENT
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Abstract 
This paper examines the role of the World Trade Organisation (WTO) in the promotion of 
international trade and investment. It gives a brief historical background of the limitations and 
constrains of international trade prior to the establishment of the WTO. The establishment of the 
WTO heralded a multilateral international institution with a global face. The existence of WTO 
has led to the liberalisation of international trade and investment. The WTO also has well-
structured institutions to ensure economic globalisation and enforcement of trade regimes 
amongst member states. However, the mistrust and lack of ability for states to put their economic 
difference aside has stalled trade negotiation rounds. The polemics between developed and 
developing member states have led to a proliferation of regional economic organisation which 
policies sometimes run foul with that of WTO. This has the potential of weakening the impact of 
WTO. It is thus concluded herein that, for WTO to continue to be effective and not lose its 
relevance, it must continue to assure its member states, especially the developing countries, of 
having their interest at heart by ensuring that it does not just promote free but fair trade. 
 
Keywords: World Trade Organisation, International Trade, General Agreement on Trade and 
Tariffs, Most Favoured Nation, National Treatment 
 
1. Introduction 
International law largely recognises the sovereignty of states over their internal affairs. States 
also exercise unfettered authority over their domestic jurisdiction. These principles are so 
important and generally recognised in international law that they have gained the prominence of 
international customary law significance. Consequently, states take full charge and determine 
what happens within their territory through the exercise of territorial sovereignty.The stricto 
senso application of the above principles of international law would mean that it becomes 
impossible to achieve what is referred to as international committee of nations. Hence, states 
have to give away certain percentage of their sovereign right in order for things to work.
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This is 
more necessary, as no state is an island of itself. For international organizations such as United 
Nations and the other to be formed, this compromise is required. In fact, the lack of this 
compromise was largely responsible for the failure of the League of Nations. 
Narrowing it down to the aspect of trade, states exercise economic sovereignty by 
determining and controlling the trade within its territory. States determine the kind of goods that 
come in and out of their territory. A state may decide to seal its borders to prevent any goods 


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